Starting business without funds
Starting a business in a recession without any cash might not be a bad idea. Rachel Bridge helps explain how and warns of the pitfalls, writes FRANK DILLON
AS AN EXPERIENCED newspaper journalist, Rachel Bridge has a facility for coming up with eye-catching titles. Before her latest book How to start a business without any money, she had already penned How to make a million before lunchtime, a work she translated onto stage and brought to the fringes of the Edinburgh Festival. Literally-speaking, the latter concept is, of course, ridiculous. “Before lunchtime” is not a timeline, it’s a metaphor about speed. So is she taking us for a ride again with the notion of becoming an entrepreneur with no money?
For the most part, the answer in this case is no. Bridge has produced a smart guide to how to get a business up and running without a significant basket of start-up funding and has some canny advice on the pitfalls to avoid. It’s also worth the purchase price if it stops a budding entrepreneur from making one of the common mistakes she highlights.
However, unlike the many start-your-own business guides produced by accountants, it avoids preaching and it’s a good entertaining read. Bridge also gets to draw on the experience of her own micro-business producing mugs with inspiring messages and is happy to share the ups and downs of her own entrepreneurial journey.
A former enterprise editor with the Sunday Times in the UK, she says she was inspired to write the book after running entrepreneurship seminars. “Time and again people asked how can I raise the finance. When I probed the reason for why they wanted money, it was for marketing but you don’t need that anymore if you use the technology that’s freely available to market your business.” Starting a business without cash is not only good for your personal bank balance it can also be good for the enterprise too as a lack of cash often forces you to be more creative, she says.
The first piece of eminently sensible advice she has is not to give up the day job. Even if you are made redundant, get a part-time one down the local pub or supermarket, she advises and work on the business without drawing a wage from it.
The second is to choose a product or services that people need rather than one they think they want. For example, when asked about their dream holiday destination, most Britons say Australia. The reality is that the top five places they actually go on holiday are Spain, France, Ireland, the US and Italy – Australia doesn’t make the top 10 even.
As a first time entrepreneur with limited funds, you should avoid being the first into any market. She cites the example of a couple called Catherine and Richard Furze who decided to start making savoury popcorn in 2009 under the Corn Again brand.
This was a novel concept in the UK and the duo spent a huge amount of time at food fairs promoting the idea of a savoury product for adults. When the idea eventually developed some traction, other more established snack food companies entered the market.
“Catherine and Richard now have to watch in frustration as their idea is seized upon by others, some of who have many times their marketing budget and distribution power. The couple were right, there is indeed a demand for savoury popcorn but the sad thing for them is that they may not ultimately be the ones who benefit,” she says.
She also suggests having multiple routes to market. This might include retail, online store, mail order and market stall and highlights the advantages of choosing small ticket items over large ones whereby buyers don’t have to think or consult anymore about the purchase.
Bridge has some useful advice for those considering doing business with retail multiples, a minefield for the naïve. Aside from the usual warnings, however, she is surprisingly upbeat about minions doing business with the “big boys”.
“In the past few years there has been a big shift among large retailers towards buying from small enterprises in the belief that entrepreneurs bring innovation and freshness to their shelves,” she notes.
She advises entrepreneurs to make their product as regionally identifiable as possible as provenance is a great buzzword right now. Being small is not a problem. Small producers listed with Tesco and Waitrose in the UK supply their products to between 10 and 20 stores on average and both supermarkets have taken on small producers who make only enough to supply one store, she notes.
Bridge also points out the advantages of starting a business in a recession, noting that costs are likely to be much cheaper and suppliers are more likely to be more open to negotiation as they will have fewer customers. With everyone adopting a pared down mentality, there is less need to be seen to have a snazzy office or flash car.
“In these hard times, customers don’t just not expect ostentation, they do not want it at all – it just feels all wrong – which is fantastic news for the minimalist start-up,” she says.
How to Start a Business without any Money by Rachel Bridge is published by Virgin Books, €14.99